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Title: Rent Matters: What are the Impacts of Rent Stabilization Measures?
Citation Type: Miscellaneous
Publication Year: 2018
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Abstract: Among the first concepts often taught in traditional economics classes are the notions that the minimum wage tends to reduce employment and that rent regulation tends to reduce housing availability. In recent years, the evidence supporting the negative impacts of the minimum wage has become increasingly weak: economists generally agree that moderate increases in the minimum wage have almost no discernible impacts on overall employment, partly because higher-paid workers have more money to spend, tend to be more motivated, and are often better matched with their jobs. But what about rent regulation? It is important to note that popular demand for restricting rent increases tend to occur in times of acute housing shortfalls, such as in the U.S. during World War II. Early rent regulations were often quite severe in their application, but subsequent forms of rent control— viewed as the second generation of rent stabilization programs—tend to allow rents to rise as long as they remain below some target, offer decontrol if the property is vacated, and seek to stabilize housing through other mechanisms such as restrictions on evictions. As in the minimum wage literature, the evidence on the impacts of these more moderate rent regimes is more mixed than older economics textbooks might indicate. Evidence suggests there is little negative impact on new construction, which is logical given that newly produced units have no initial rent targets. However, there is also research that suggests that rent regulations may lead landlords to reduce maintenance or take units off the market through conversion into condos or owner move-in evictions. Some proponents of rent regulations have argued for limiting what they see as loopholes by, for example, making condo conversion more difficult . . .
Url: https://dornsife.usc.edu/assets/sites/242/docs/Rent_Matters_PERE_Report_Web.pdf
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Authors: Pastor, Manuel; Carter, Vanessa; Abood, Maya
Publisher: USC Dornsife Program for Environmental and Regional Equity
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other
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